Budget 2024: Plan to develop 'iconic tourist centres' and islands, including Lakshadweep

Projects to elevate port connectivity, tourism infrastructure and amenities will be undertaken on India’s islands, including Lakshadweep, as per the budget. Image: Shutterstock

Amid an India-Maldives row that resulted in an increased interest in Lakshadweep holidays, and a rise in spiritual travel inquiries with the opening of the Ram Mandir in Ayodhya, the government has charted out a plan to develop and boost domestic tourism within the country.

“The success of organising G20 meetings in 60 places presented diversity of India to a global audience,” Finance Minister (FM) Nirmala Sitharaman said, while presenting the Interim Budget for 2024. “Our economic strength has made the country an attractive destination for business and conference tourism. Our middle class also now aspires to travel and explore. Tourism, including spiritual tourism, has tremendous opportunities for local entrepreneurship.”

Sitharaman says that states will be encouraged to take on ‘comprehensive development of iconic tourist centres, branding and marketing them at global scale’.

Based on the quality of facilities and services offered, a framework for ‘rating of the centres’ will be established. The states can avail of long-term interest-free loans to finance such development, on a matching basis.

Moreover, projects to elevate port connectivity, tourism infrastructure and amenities will be undertaken on India’s islands, including Lakshadweep, to also boost local employment.

Additionally, the government plans to upgrade 40,000 railway bogies to Vande Bharat standards, in a bid to improve safety and the overall rail passenger experience.

“Since this is a vote on account or Interim Budget, we didn’t expect a big announcement,” says Aashish Gupta, consulting CEO, FAITH (Federation of Associations in Indian Tourism & Hospitality). “We hope that the actual Budget in July will take forward the statement of intent announced, to develop iconic destinations in partnerships with states, through an incentive-based system.”

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“Moreover, it is hoped that the plan to further focus on domestic tourism and a recognition of MICE tourism capabilities, along with new airports and better trains and highways, will move forward,” Gupta adds.

“The Indian air travel market is one of the fastest growing in the world,” says Aloke Bajpai, co-founder and group CEO of travel portal Ixigo. “A total of 327 million passengers were handled across airports in FY23. We are pleased to see that this will remain an area of focus going forward. Infrastructure development and improved connectivity for offbeat tourist destinations like Lakshadweep will help build and promote the unexplored and hidden gems of India and will help further boost the tourism sector.”

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The hospitality industry, however, is still awaiting infrastructure status, adds Gupta. “A focus on enhancing foreign tourist arrivals through enhanced overseas marketing budgets and free tourist visas would be beneficial. Moreover, a reduction of GST to 12 percent for hotels and restaurants and 1.8 percent to tour operators with full set-offs will reflect a long-term intent to promote a tourism-, travel- and hospitality-driven economy.”